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2 thoughts on “Thoughts on the Debt Ceiling Debate”

Good to have you back posting again John – I look forward to more of your insights. This time you have me confused with reference to the ‘platinum-coin option’ this is new to me, never having seen any previous reference to platinum coins – would you be kind enough to explain? Thanks.

The law allows the US government to mint a platinum coin of any denomination. This was intended to allow the issue of commemorative coins, but the letter of the law would allow Obama to mint, say, a $1 trillion coin and deposit it at the Federal Reserve, effectively printing money to pay the bills. The idea is that the threat of this would force the Republicans to capitulate on the debt ceiling. I am not so sure that that would work; and there are questions about the actual legality of the move. As it happens, FT Alphaville has a good write-up on the subject this morning: http://ftalphaville.ft.com/2013/01/04/1322673/debt-ceiling-dealing-drama/